The harsh reality of youth unemployment is that in many places where it is high, employers cannot find enough skilled workers to hire. In a report launched yesterday, Education to Employment: Designing a System That Works, the McKinsey Center for Government addresses what it describes as “two crises, one paradox”—widespread youth unemployment and jobs left vacant due to a lack of qualified people. The report looks at 100 skills training programs in 25 countries, and includes interview results from more than 8,000 youth, employers, and educational institutions across nine different countries, including Turkey, Saudi Arabia, and Morocco.
Part of the youth unemployment challenge is poor coordination and lack of information among students, education providers, and employers. Strikingly, “fewer than half of youth and employers…believe that new graduates are adequately prepared for entry-level positions,” whereas 72 percent of education providers believe they are.
The McKinsey report suggests that there is a lot that employers can do to resolve the skills gap. Those employers that actively engage with schools and students (such as helping with curriculum design, connecting with young people through new media, and providing training through industry-organized programs) have the most success in getting qualified employees, and “69 percent said they face no challenges in recruiting the talent they require.” However, less than a third of companies are engaged to this extent. In contrast, about 44 percent of employers have “an almost cavalier attitude to hiring—and it shows.” These employers connect less with educational institutions and train their employees less, and consequently, “only 25 percent say they are finding the right talent.” These results provide some optimism for resolving the conundrum of youth unemployment and staffing shortages—and show the difference that a proactive approach from employers can make.
Interestingly, while we have long been aware of the need for stronger technical skills among graduates, employers actually place greater importance on “soft skills,” for example ranking work ethic and team work above computer literacy or training in the discipline. And they express significant dissatisfaction in finding workers with acceptable soft skills.
Innovative programs for building soft skills as well as technical skills are shedding some light on what works. The McKinsey report cites the example of Year Up—a yearlong program for low-income young people in the U.S.—that is a combination of hard and soft skills training and internship. To reinforce vital workplace behaviors, students receive consequences like pay deductions for actions such as tardiness. The program seems to be working: four months after graduating from the program, 84 percent of Year Up students are either full-time college students or have a job.
The nonprofit Education for Employment (EFE) is another innovative organization working to develop in young people the skills that are most in demand in the private sector. EFE’s focus is the Middle East (it has branches in Egypt, Jordan, Morocco, Palestine, Tunisia, and Yemen), a region which suffers from epic (and destabilizing) youth unemployment. EFE also coordinates with its private sector partners to commit to hiring these young people.
The big question is how to bring to scale such programs as Year Up and EFE. On a webcast yesterday to launch the report, McKinsey assembled a panel of experts from academia, labor, and business. All of the panelists agreed that scale up is essential, and possible, although so far no one has demonstrated how to do it. The answer undoubtedly is to keep trying.